Retirement
At some point, we all stop working and retire. While this may feel far away, it's not too early to start planning your financial future. Unfortunately, most Americans aren't as prepared as they should be for retirement. If you're thinking about starting to save, then an Individual Retirement Account, or IRA, may be right for you.*
Nearing Retirement
You've worked hard to earn what you have, and we want to help you make the most of it. If your next chapter in life is enjoying retirement, an IRA, which is subject to special tax advantages, helps you build savings more effectively. You can move your funds into CDs, money market, or savings, all of which can be set up as IRA accounts in either Roth or Traditional plans.
What is an IRA?
An IRA is known as an Individual Retirement Account. This account falls under the category of retirement, so it has specific federal laws that apply, but otherwise functions similar to your personal accounts. Depending on the IRA plan type that you choose, Traditional or Roth, you can earn money in your WaFd IRA from compound interest each year. Regardless of the plan type you choose, money in your retirement account is not taxed while the money stays in an IRA plan. WaFd Bank offers certificates of deposit, savings, and money market account IRAs.
I'd like to open an IRA. What are my options?
WaFd Bank offers two types of IRAs, Roth and Traditional. The main difference is the way they are taxed. When you open a Roth IRA, taxes are paid before putting money into the account, so you don't have to pay taxes when you withdraw your money in retirement. On the other hand, when you put money into a Traditional IRA you do not pay taxes. Instead, when you reach retirement and begin to withdraw your money, you'll pay taxes at the time of your withdrawal.
Find a Local Branch| Exploring Your IRA Option | Roth IRA | Traditional IRA |
|---|---|---|
| Can I contribute? | You are eligible to contribute if you earn compensation (or file a joint tax return with a spouse who earns compensation) and your modified adjusted gross income (MAGI) is less than or within the defined limits. More information about MAGI limits is available on the IRS website. | You are eligible to contribute at any age if you earn compensation (or file a joint return with a spouse who earns compensation). |
| Can I take an income tax deduction for my contribution? | No. Roth IRA contributions are not tax-deductible. | It depends on your marital and tax-filing status, your MAGI, and whether you or your spouse actively participates in an employer-sponsored retirement plan. If neither you nor your spouse is an active participant, then you are eligible to deduct your full contribution. |
| What are the benefits? |
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| Will I ever be required to withdraw the money? | No. Roth IRA owners are never required to take distributions. After your death, however, your beneficiaries may be subject to required distributions. | Yes. Traditional IRA owners are required to take annual minimum distributions beginning for the year they turn age 73 years. Your beneficiaries may also will be subject to required distributions. |
| Roth IRA | |
|---|---|
| Can I contribute? | You are eligible to contribute if you earn compensation (or file a joint tax return with a spouse who earns compensation) and your modified adjusted gross income (MAGI) is less than or within the defined limits. More information about MAGI limits is available on theIRS website. |
| Can I take an income tax deduction for my contribution? | No. Roth IRA contributions are not tax-deductible. |
| What are the benefits? |
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| Will I ever be required to withdraw the money? | No. Roth IRA owners are never required to take distributions. After your death, however, your beneficiaries may be subject to required distributions. |
| Traditional IRA | |
|---|---|
| Can I contribute? | You are eligible to contribute if you are under age 70 years and 6 months and earn compensation (or file a joint return with a spouse who earns compensation). |
| Can I take an income tax deduction for my contribution? | It depends on your marital and tax-filing status, your MAGI, and whether you or your spouse actively participates in an employer-sponsored retirement plan. If neither you nor your spouse is an active participant, then you are eligible to deduct your full contribution. |
| What are the benefits? |
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| Will I ever be required to withdraw the money? | Yes. Traditional IRA owners are required to take annual minimum distributions beginning for the year they turn age 70 years and 6 months. Your beneficiaries also will be subject to required distributions. |
Living in Retirement
Your hard work has allowed you to enjoy the retirement chapter of your life. Now more than ever, it's important to make the most of your money so you can continue to enjoy what you've earned. We've got some ideas to help.* Plus, at WaFd Bank, we offer no-fee IRA rollovers and transfers.
Rolling over your IRA for a better retirement
Rolling over retirement plan assets to another retirement plan or an IRA will not only preserve your tax benefits, but may possibly provide you with additional benefits.
Find a Local Branch
| When You Can Roll It Out | Employee-sponsored retirement plans have “triggering events” that dictate when you may withdraw the money from your account, such as attainment of retirement age, termination of employment, disability, or death. Next, you must ensure that the amount you are taking is eligible to be rolled over. Most distributions from retirement plans are eligible to be rolled over to IRAs or other eligible retirement plans, but some are not. Talk to your employer about your options on either of the above. |
| What can I roll over to a Traditional IRA? |
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| What can I roll over to a Roth IRA? |
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*Please consult with a tax professional to determine which options meet your financial goals.
**Pretax assets rolled over from a retirement plan to a Roth IRA must be included in taxable income in the year of distribution.
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